Oil & Ruble Dump, Gold Jumps On Leaked OPEC Decision – “No Cut In Production”

With just over an hour until OPEC’s press conference, details are leaking:

OPEC agreed to set a new oil-output ceiling of 31.5 million barrels a day, according to a delegate with knowledge of the decision.

The increase is from a previous ceiling of 30 million barrels and does not include production from Indonesia, which joined the producer group after a break of almost seven years, according to the delegate, who asked not to be identified because the decision hasn’t been made public.

But current production is at 31.5 million barrels, and so this is OPEC adjustinmg up to the current reality.

And Crude is plunging back below $40…

And gold is jumping…

As The Ruble tanks…

The Russians are not happy:

So what does all this mean for oil prices? Nothing good: according to a WSJ report on an internal OPEC document written to prepare a crucial meeting Friday warns oil prices will remain under pressure in the near future while markets would remain oversupplied even if the cartel cut its production.

The analysis, which was reviewed exclusively by The Wall Street Journal, underscores the conundrum faced by the Organization of the Petroleum Exporting Countries as it tries to respond to an oil price slump. At the meeting Friday in Vienna, a heated debate is expected between a faction that wants a reduction in production to boost prices and another arguing such a move would only give away market share to competitors such as U.S. tight oil.

The document, a transcript of a technocrat meeting last week to prepare the summit, warns that “overall the current surplus, while easing, should continue to cap the upside in oil prices for the coming quarters.” OPEC’s secretariat says in a transcript of its meeting that took place last week. The Economic Commission Board—as the technocratic meeting is called—gathers experts to advise ministers before an OPEC meeting on the possible outcomes of their decisions.

The document shows that, if current production remains unchanged at 31.5 million barrels a day, markets will still be oversupplied by 700,000 barrels a day in 2016—though that would be less than the glut of 1.8 million a barrel a day OPEC estimates for this year.